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Court says Warner Bros. owns Superman copyright

Court says Warner Bros. owns Superman copyright

It’s hard to think of a more recognizable character than Superman, or a more lucrative one, at that. People still line up for Superman movies and little kids still wear Superman pajamas with pride. It’s not surprising then that those with colorable legal interests in the Superman copyright have been fighting over it for decades.

New federal court ruling

In a major January 10, 2013, ruling, a three-judge panel of the U.S. Court of Appeals for the 9 th Circuit, sitting in Pasadena, Cal., held unanimously that Burbank-based entertainment giant Warner Bros. owns the Superman franchise. (The court designated this opinion as “not for publication.”)

The Superman character was reportedly created by two artists in 1938 – Jerry Siegel and Joe Shuster – and sold shortly thereafter to Warner Bros. and its DC Comics for a pittance. Ever since, the co-creator’s heirs and successors in interest have been embroiled in legal attempts to challenge and terminate the original grant of copyright to Warner Bros.

The 9 th Circuit ruling concerns the descendants of Siegel. The court found as a matter of law that a 2001 letter from their attorney accepting an oral offer from Warner Bros. to buy the family’s one-half share in the Superman copyright was a valid, binding contract under California law, despite the letter’s informal nature.

The court explains that as long as the letter had the “minimal requirements to form an enforceable contract” it is binding even though all the details are not expressly included. Those could later be memorialized. The letter was “sufficiently definite” for court enforcement as a contract.

The 9 th Circuit remanded the case back for further consideration by the trial court, the U.S. District Court for the Central District of California.

(A similar lawsuit between the family of the other co-creator and Warner Bros. was reportedly also decided in Warner Bros.’ favor in October 2012.)

Action on remand

Warner Bros. and its DC Comics have wasted no time in asking the District Court to rule in their favor on remand in light of the 9 th Circuit opinion. On February 7, the entertainment company filed a motion for summary judgment asking the court to grant the motion based on the 9 th Circuit’s holding as a matter of law that the 2001 letter was a valid settlement that effectively transferred the copyright interest in Superman to Warner Bros.

A hearing on the matter is scheduled for March 11, 2013. Intellectual property advocates, artists and creators, and the entertainment industry await the outcome with keen interest.

Tax implications

From the layperson’s perspective, most people are drawn to the idea of owning Superman; few realize that there are substantial and complex tax ramifications to owning highly valued intellectual property. An experienced tax attorney should always review the unique and very specific body of law on sales or transfers of different types of intellectual property as particular assets with specified tax treatments. The ownership rights in a copyright, particularly Superman, would have their own specified tax conduct, which are also different for each particular type of IP (copyright, patent, trademark, trade names, franchises and so on).

A valuable lesson that can be taken from the Superman litigation is the importance of retaining experienced legal counsel for guidance in protecting intellectual property – such as inventions or original, creative works – from wrongful use by those without legal rights to do so.

Intellectual property counsel

A knowledgeable lawyer can advise inventors and artists, from the beginning of a creative endeavor, how to preserve ownership of their work through copyrights, patents, trademarks, licenses and other legal mechanisms. Likewise, skilled legal counsel is needed to protect the rights of individuals and companies who seek to sell or acquire interests in intellectual property through a sale, purchase or license. Ultimately, if a dispute does arise over the ownership of (or right to use) the intellectual property, a litigation attorney can provide advice about resolving the dispute, including determining what legal action to take, and assist in bringing or defending intellectual property lawsuits.